Ajay Singh now SpiceJet chief, firm garners Rs 300-crore funding

Updated: Thursday, May 21, 2015, 16:52 [IST]

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New Delhi, May 21: Budget passenger carrier SpiceJet on Thursday said one of its founders, Ajay Singh, has been appointed as chairman and that the low-cost carrier (LCC) has managed to garner Rs.300 crore funding.

According to the company, in a meeting held on Thursday its board of directors appointed Ajay Singh and his wife Shiwani Singh as directors.

Harsha Vardhana Singh, who is an adjunct professor of international and public affairs at Columbia University, New York, has been given the charge of an independent director.

Till now Ajay Singh was functioning as a director of the company after buying out the stake of the erstwhile promoter Kalanithi Maran and KAL Airways earlier in the year.

On February 24, the airline's ownership was transferred to Ajay Singh from erstwhile promoter Kalanithi Maran and KAL Airways.

On January 29, Maran sold his majority stake to Ajay Singh.

Earlier on January 15, the airline's board approved the plans to allow Maran together with KAL Airways to off-load their stake in the company to Ajay Singh after regulatory clearances.

Maran, together with KAL Airways, held 58.4 percent stake in SpiceJet, while Ajay Singh had a 4.5 percent stake. Maran acquired SpiceJet for close to Rs.750 crore.

In December 2014, Maran made it clear that no fresh bailout package could be put together for the airline in which nearly $400 million or Rs.2,500 crore has been invested since 2010.

This is Ajay Singh's second innings with the airlines which he co-founded with Bhupendra Kansagra in 2005. However, he sold his stake along with Kansagra and assets buyout specialist Wilbur Ross in 2010 to Sun Group's Maran.

"The board also took on record mobilization of additional funding of Rs.300 crore through various sources," the company was quoted in a statement.

Under the company's revival plan fresh funds were infused into the airline after the takeover was completed.

The infusion of funds worth Rs.1,500 crore was expected in a staggered manner till April.

Some estimates place the infused amount at Rs.500 crore that was invested in the airline in the first tranche.

The airline plans to raise funds up to Rs.1,500 crore through issue of securities.

"(Board) also took on record company's efforts to increase its fleet size to 45-50 aircraft by the financial year ending March 2016," the statement added.

The airline's fleet size late last year stood at 55 before a financial crises lead it to truncate it. Currently, the fleet size stands at 35 which comprises 20 Boeing aircraft and 15 Bombardier Q400s.

In April, the airline leased out three Boeing-737s from a Czech company on a short-term wet-lease to meet the summer rush.

The company has also increased the number of its flights to 270 in the current summer schedule from 210 operated during the winter period.